But
not everyone is subjected to that system of penal harshness.
It all changes radically when the nation's most powerful
actors are caught breaking the law. With few exceptions,
they are gifted not merely with leniency, but full-scale
immunity from criminal punishment. Thus have the most
egregious crimes of the last decade been fully shielded from
prosecution when committed by those with the greatest
political and economic power: the construction of a
worldwide torture regime, spying on Americans'
communications without the warrants required by criminal law
by government agencies and the telecom industry, an
aggressive war launched on false pretenses, and massive,
systemic financial fraud in the banking and credit industry
that triggered the 2008 financial crisis.

This
two-tiered justice system was the subject of
my last book, "With Liberty and Justice for Some" , and
what was most striking to me as I traced the recent history
of this phenomenon is how explicit it has become. Obviously,
those with money and power always enjoyed substantial
advantages in the US justice system, but lip service was at
least always paid to the core precept of the rule of law:
that - regardless of power, position and prestige - all
stand equal before the blindness of Lady Justice.

It
really is the case that this principle is now not only
routinely violated, as was always true, but explicitly
repudiated, right out in the open. It is commonplace to hear
US elites unblinkingly insisting that those who become
sufficiently important and influential are - and should be -
immunized from the system of criminal punishment to which
everyone else is subjected.

Worse,
we are constantly told that immunizing those with the
greatest power is not for their good, but for our good, for
our collective good: because it's better for all of us if
society is free of the disruptions that come from trying to
punish the most powerful, if we're free of the deprivations
that we would collectively experience if we lose their
extraordinary value and contributions by prosecuting them.

This
rationale was popularized in 1974 when Gerald Ford explained
why Richard Nixon - who built his career as a
"law-and-order" politician demanding harsh punishments and
unforgiving prosecutions for ordinary criminals - would
never see the inside of a courtroom after being caught
committing multiple felonies; his pardon was for the good
not of Nixon, but of all of us. That was the same reasoning
hauled out to justify immunity for officials of the National
Security State who tortured and telecom giants who illegally
spied on Americans (we need them to keep us safe and can't
disrupt them with prosecutions), as well as the refusal to
prosecute any Wall Street criminals for their fraud
(prosecutions for these financial crimes would disrupt our
collective economic recovery).

A new
episode unveiled on Tuesday is one of the most vivid
examples yet of this mentality. Over the last year, federal
investigators found that one of the world's largest banks,
HSBC, spent
years committing serious crimes , involving money
laundering for terrorists; "facilitat[ing] money laundering
by Mexican drug cartels"; and "mov[ing] tainted money for
Saudi banks tied to terrorist groups". Those investigations
uncovered substantial evidence "that senior bank officials
were complicit in the illegal activity." As but one example,
"an HSBC executive at one point argued that the bank should
continue working with the Saudi Al Rajhi bank, which has
supported Al Qaeda."

Needless
to say, these are the kinds of crimes for which
ordinary and powerless people are prosecuted and
imprisoned with the greatest aggression
possible. If you're Muslim and your conduct gets
anywhere near helping a terrorist group, even by
accident,
you're going to prison for a long, long time
. In fact, powerless, obscure, low-level
employees are
routinely sentenced to long prison terms
for engaging in relatively petty money
laundering schemes, unrelated to terrorism, and
on a scale that is a tiny fraction of what HSBC
and its senior officials are alleged to have
done.

But not
HSBC. On Tuesday, not only did the US Justice
Department announce that HSBC would not be
criminally prosecuted, but
outright claimed that the reason is that they
are too important , too instrumental to
subject them to such disruptions. In other
words, shielding them from the system of
criminal sanction to which the rest of us are
subject is not for their good, but for our
common good. We should not be angry, but
grateful, for the extraordinary gift bestowed on
the global banking giant:

"US
authorities defended their decision not to
prosecute HSBC for accepting the tainted
money of rogue states and drug lords on
Tuesday, insisting that a $1.9bn fine for a
litany of offences was preferable to the
'collateral consequences' of taking the bank
to court. . . .

"Announcing the record fine at a press
conference in New York, assistant attorney
general Lanny Breuer said that despite
HSBC"s 'blatant failure' to implement
anti-money laundering controls and its
wilful flouting of US sanctions, the
consequences of a criminal prosecution would
have been dire.

"Had
the US authorities decided to press criminal
charges, HSBC would almost certainly have
lost its banking licence in the US, the
future of the institution would have been
under threat and the entire banking system
would have been destabilised.

"HSBC,
Britain's biggest bank, said it was
'profoundly sorry' for what it called 'past
mistakes' that allowed terrorists and
narcotics traffickers to move billions
around the financial system and circumvent
US banking laws. . . .

"As
part of the deal, HSBC has undertaken a
five-year agreement with the US department
of justice under which it will install an
independent monitor to assess reformed
internal controls. The bank's top executives
will defer part of their bonuses for the
whole of the five-year period, while bonuses
have been clawed back from a number of
former and current executives, including
those in the US directly involved at the
time.

"John
Coffee, a professor of law at Columbia Law
School in New York, said the fine was
consistent with how US regulators have been
treating bank infractions in recent years.
'These days they rarely sue individuals in
any meaningful way when the entity will
settle. This is largely a function of
resource constraints, but also risk
aversion, and a willingness to take the
course of least resistance,' he said."

DOJ
officials touted the $1.9 billion fine HSBC
would pay, the largest ever for such a case. As
the Guardian's Nils Pratley
noted, "the sum represents about four weeks'
earnings given the bank's pre-tax profits of
$21.9bn last year." Unsurprisingly, "the steady
upward progress of HSBC's share price since the
scandal exploded in July was unaffected on
Tuesday morning."

The New
York Times Editors
this morning announced : "It is a dark day
for the rule of law." There is, said the NYT
editors, "no doubt that the wrongdoing at HSBC
was serious and pervasive." But the bank is
simply too big, too powerful, too important to
prosecute.

That's not
merely a dark day for the rule of law. It's a
wholesale repudiation of it. The US government
is expressly saying that banking giants reside
outside of - above - the rule of law, that they
will not be punished when they get caught
red-handed committing criminal offenses for
which ordinary people are imprisoned for
decades. Aside from the grotesque injustice, the
signal it sends is as clear as it is
destructive: you are free to commit whatever
crimes you want without fear of prosecution. And
obviously, if the US government would not
prosecute these banks on the ground that they're
too big and important, it would - yet again, or
rather still - never let them fail.

But this
case is the opposite of an anomaly. That the
most powerful actors should be immunized from
the rule of law - not merely treated better, but
fully immunized - is a constant, widely affirmed
precept in US justice. It's applied to powerful
political and private sector actors alike. Over
the past four years, the CIA and NSA have
received the same gift, as have top Executive
Branch officials, as has the telecom industry,
as has most of the banking industry. This is how
I described it in "With Liberty and Justice for
Some":

"To
hear our politicians and our press tell it,
the conclusion is inescapable: we're far
better off when political and financial
elites - and they alone - are shielded from
criminal accountability.

"It
has become a virtual consensus among the
elites that their members are so
indispensable to the running of American
society that vesting them with immunity from
prosecution - even for the most egregious
crimes - is not only in their interest but
in our interest, too. Prosecutions,
courtrooms, and prisons, it's hinted - and
sometimes even explicitly stated - are for
the rabble, like the street-side drug
peddlers we occasionally glimpse from our
car windows, not for the political and
financial leaders who manage our nation and
fuel our prosperity.

"It is
simply too disruptive, distracting, and
unjust, we are told, to subject them to the
burden of legal consequences."

That is
precisely the rationale explicitly invoked by
DOJ officials to justify their decision to
protect HSBC from criminal accountability. These
are the same officials who previously immunized
Bush-era torturers and warrantless
eavesdroppers, telecom giants, and Wall Street
executives, even as they continue to persecute
whistleblowers at record rates and prosecute
ordinary citizens - particularly poor and
minorities - with extreme harshness even for
trivial offenses. The administration that now
offers the excuse that HSBC is too big to
prosecute is the same one that quite consciously
refused to attempt to break up these banks in
the aftermath of the "too-big-to-fail" crisis of
2008, as
former TARP overseer Neil Barofsky , among
others,
has spent years arguing .

And, of
course, these HSBC-protectors in the Obama DOJ
are the same officials responsible for
maintaining and expanding what NYT Editorial
Page editor Andrew Rosenthal
has accurately described as "essentially a
separate justice system for Muslims," one in
which "the principle of due process is twisted
and selectively applied, if it is applied at
all." What has been created is not so much a
"two-tiered justice system" as a multi-tiered
one, entirely dependent on the identity of the
alleged offender rather than the crimes of which
they are accused.

Having
different "justice systems" for citizens based
on their status, wealth, power and prestige is
exactly what the US founders argued most
strenuously had to be avoided (even as they
themselves maintained exactly such a system).
But here we have in undeniable clarity not
merely proof of exactly how this system
functions, but also the rotted and fundamentally
corrupt precept on which it's based: that some
actors are simply too important and too powerful
to punish criminally. As the Nobel Prize-winning
economist Joseph Stiglitz
warned in 2010 , exempting the largest banks
from criminal prosecution has meant that
lawlessness and "venality" is now "at a higher
level" in the US even than that which prevailed
in the pervasively corrupt and lawless
privatizing era in Russia.

Having the
US government act specially to protect the most
powerful factions, particularly banks, was a
major impetus that sent people into the streets
protesting
both as part of the early Tea Party
movement as well as the Occupy movement. As well
as it should: it is truly difficult to imagine
corruption and lawlessness more extreme than
having the government explicitly place the most
powerful factions above the rule of law even as
it continues to subject everyone else to
disgracefully harsh "justice". If this HSBC gift
makes more manifest this radical corruption,
then it will at least have achieved some good.

UPDATE

By
coincidence, on the very same day that the DOJ
announced that HSBC would not be indicted for
its multiple money-laundering felonies,
the New York Times published a story
featuring the harrowing story of an
African-American single mother of three who was
sentenced to life imprisonment at the age of 27
for a minor drug offense:

"Stephanie George and Judge Roger Vinson had
quite different opinions about the lockbox
seized by the police from her home in
Pensacola. She insisted she had no idea that
a former boyfriend had hidden it in her
attic. Judge Vinson considered the lockbox,
containing a half-kilogram of cocaine, to be
evidence of her guilt.

"But
the defendant and the judge fully agreed
about the fairness of the sentence he
imposed in federal court.

"'Even
though you have been involved in drugs and
drug dealing,' Judge Vinson told Ms. George,
'your role has basically been as a
girlfriend and bag holder and money holder
but not actively involved in the drug
dealing, so certainly in my judgment it does
not warrant a life sentence.'

"Yet
the judge had no other option on that
morning 15 years ago. As her stunned family
watched, Ms. George, then 27, who had never
been accused of violence, was led from the
courtroom to serve a sentence of life
without parole.

"'I
remember my mom crying out and asking the
Lord why,' said Ms. George, now 42, in an
interview at the Federal Correctional
Institution in Tallahassee. 'Sometimes I
still can't believe myself it could happen
in America.'"

As the NYT
notes - and read her whole story to get the full
flavor of it - this is commonplace for the poor
and for minorities in the US justice system.
Contrast that deeply oppressive, merciless
punishment system with the full-scale immunity
bestowed on HSBC - along with virtually every
powerful and rich lawbreaking faction in America
over the last decade - and that is the living,
breathing two-tiered US justice system. How this
glaringly disparate, and explicitly
status-based, treatment under the criminal law
does not produce serious social unrest is
mystifying.

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